2.

3 Manufacturing Plant Design

Premise
Choosing the appropriate location for setting up a new manufacturing plant is one of the first
steps that must be considered carefully. The right location not only influences the manufacturing
operation of the plant, it also contributes to the wellness of the plant as a whole. Certain
justifications and evaluations must be carried out properly to decide whether the location of
choice is good for the plant or not.
Research done by the team has shown that Nilai Industrial Park is a good location to startup the
plant. Nilai is a rapidly growing town located in Negeri Sembilan, Malaysia. It has several
industrial areas and some of the most well-known education institutions. For the industrial areas,
it is well established as the local government encourages more business input. The local
government also has new undergoing development plans to continue supporting more industries.
Based on the above, the team has chosen a property that is on rental. The property details are as
follow:

Figure 36: The property brochure.

Price: RM13000/month
Location: Nilai Industrial Park, Nilai, Malaysia.
1.5 Storey SEMI-D Factory at NILAI Industrial Park

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Benefits:

Easy access to LEKAS & PLUS Highway

Near to Arab Malaysian Industrial Park, Nilai 3, Nilai 7, Nilai Inland Port
Near to Perusahaan Mahkota, Semenyih, Villaraya, Beranang, Nilai, Kajang, Hulu
Langat, Sg.Lalang, Beranang, Broga, Rinching
Easy access to Seremban, Semenyih, Bangi, Kajang, Balakong, Cheras, Kajang, Seri
Kembangan, Serdang

Factory Specifications:

Figure 37: The general floor plan of the property.

Land area: 18000 sq. ft.

Built-up: 10000 sq. ft.
Electricity: 200 Amp/3 phase
Height: 30 feet

Free Security Alarm System:

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Automatic Gate System

Security CCTV Recorder System
Electric Roller Shutter System
Security Access System at Main Door

Further details:

QuikPro No: UP2707334

Property Type: Factory
Tenure: Freehold
Title Type: Individual
Building Name: Nilai Industrial Park
Unit Type: Vacant
Occupancy: Vacant
Furnishing: Partly Furnished
Facing Direction: South

Website: http://homes.trovit.my/index.php/cod.frame/url.http%253A%252F
%252Fwww.malaysiarealestate.com.my%252Flisting%252FNilai%252BIndustrial%252BParkFactory-ForRent-2707334-R/id_ad.J1n1sbc1c1a1w/what_d.factory
%20nilai/type.2/origin.2/section.1/section_type.1/pop.1

Figure 38: Nilai area as shown on the map.

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By referring to the mentioned property, the team has justified that it is an excellent location
based on the points below:

Good value for money - lower rental rate than the others within the same area
Great accessibility - near to major highways, cities and ports
Near to other factories - easy for outsourcing material supplies
Extra benefits - partly furnished, free alarm system, office and showroom integrated

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Process and Production

Once the location for setting up the plant is decided, the team can then proceed to the next stage,
which is to determine all types of process that would be involved in mass producing the vehicle.
Each parts and components of the vehicle was assessed carefully to find out the best process
possible to fabricate them, taking into consideration also the production rate, machine
availability and ease of manufacturability.
Figure below shows the process flowchart for producing the vehicle (please refer to appendix for
clearer version):

Figure 39: Process flowchart.

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Based on the flowchart, the list of machines and equipment required was also obtained. The list
will be shown later in the Price section, together with their respective cost in the market and
power rating.
The team then designed the floor plan based on the factory specifications provided and the
quantity of machines and equipment required. The floor plan was designed according to the exact
dimensions of the factory and the machine sizes.
Figure below shows the floor plans for both ground floor and first floor (please refer to appendix
for clearer version):

Figure 40: Floor plan for ground floor.

Figure 41: Floor plan for first floor.

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Overall, the factory floor plan can be divided into several stations as described below:

Steel tube and sheet metal workstation

- Cutting and bending steel tubes
- Cutting and pressing sheet metals

Aluminium workstation
- Cutting aluminium block into work pieces
- Milling aluminium work pieces (CNC and manual vertical)

Wood workstation
- Sawing wood lumber into smaller pieces
- Milling wood pieces (CNC)
- Boring/drilling wood pieces

Welding station
- Mainly to weld together tubes and sheet metals for the vehicles body frame

Painting station
- For painting some of the parts and components (headtube and fork for examples) after
they are welded together

Varnishing and finishing station

- For wooden parts varnishing and surface finishing before being assembled

Assembling station
- To assemble the vehicle parts by parts accordingly

Quality control (QC)

- To ensure that each of the vehicle produced passes the design and safety requirements
- Several QC stations are setup for the workstations described above (refer to
flowchart)

Packaging station
- To wrap and pack the finished product for storing or delivering purposes

Store
- To store the finished vehicle before being delivered

Testing ground
- To carry out tests on all aspects of the finished vehicle

As part of the guest lectures applications, a Job Hazard Analysis (JHA) on CNC milling was
carried out and shown below. This is categorized under safety in engineering design.
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Table 3: Job Hazard Analysis worksheet.

The team has also determined the maximum production rate of the plant per day based on the
process that takes the longest duration. It is found that the CNC milling process for aluminium
parts, namely the independent trailing arm axles and the constraint links/swing arms take the
longest time to finish (by referring to a video source that shows similar process, work piece and
cutting geometry). There are a total of 4 parts that would be produced by this particular process
in a single process flow. The time estimated to complete all 4 parts mentioned above is about 1
hour, assuming that all 3 CNC milling machines in the plant are running simultaneously. Then,
for the other parts of the vehicle, they will be started manufacturing in parallel with the others.
Finished parts will be checked, painted and assembled as indicated by the flowchart. Therefore,
the plant will be able to produce one vehicle per hour. The calculation for monthly production is
shown below:
Working hours
10 per day
Working days
28 per month
Monthly working hours
10*28=280 hours
Production
1 vehicle per hour
Monthly production
280*1=280 vehicles
Table 4: Production rate per month

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People
Once the process and production are settled, the team has also considered what types of
position/people to hire as the employees and human work force of the plant. The plant needs
people to operate machines and manage the factory; while it also needs people to do
sales/marketing/ administration and financing. Besides, human resource department, overall
logistics and some other miscellaneous positions are also needed.
Based on the requirements, the team has determined the people needed to hire. The table below
shows the positions and the number of people:

Table 5: Positions to be hired.

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Job Description

Finance department
- To manage the financial, accounting, and cost related tasks.

HR department
- To manage the allocations and welfare of the employees.

Logistics and warehousing

- To take care of the transfers and storing of outsourced materials and finished
products.

Engineering and technical department

- To manage the wellness of the factory and operate the manufacturing process and
production.
- Design engineer will carry out design improvements or design new products.
- Sales engineer will also be responsible of sales and marketing the products.

Miscellaneous
- Security guards to secure the compound and janitors to keep the compound clean.

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Staff Development Plan

New Labour Training: training for new labourer is provided before entering to
manufacturing production.
- More efficient
- Improve knowledge
- Get familiar with the process
- Prevent injury/safety reason

Engineer Exchange Program

- Electrical/assembly engineer will get the opportunity to visit/work at other
manufacturing plant (local/international) for a period of time. Engineers will be able
to learn new skill, knowledge, new perspective and improve self-esteem. R&D
engineers can get more inspiration and insight during the exchange program.

Technician Training Workshop

- Technicians that require more specific skills such as welding and assembling would
have to join the training workshop. Workshops will be conducted by the related field
expert. Not only will they learn better skills; they also learn how to handle emergency
situation.

Engineering ethics workshop and IR title training for the plants engineer (*as part of the
guest lectures applications: engineering ethics)
- Workshops or talks about the importance on engineering ethics could be conducted
for the plants engineers to train them to be more aware of their responsibility as
engineers. This will also allow the plant engineers to improve their critical thinking,
have more insight and better sense of responsibility in providing their service. As for
the IR title training, guest speakers from the related department/representatives from
the Board of Engineers Malaysia could be invited to conduct the training.

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Price
The team has also carried out the calculations on the price needed to setup the plant which
includes overheads, capital and break even.

Machines and equipment cost and electricity cost

Table 6: Cost of machines and equipment with power consumption.

Total cost of machines and equipment = RM 344890.00

Total electricity usage = power consumed/hour * runtime/day * working days * monthly bill rate
= 84.9 * 10 * 28 * 0.44
= RM 10459.68

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Material supplies cost

Table 7: Total cost for materials used in a month.

Cost for one vehicle for sale

Based on table above, the material cost for one vehicle is RM 282. After some calculations
involving the overheads, wages and profits to be made (30%) were done, the selling price of one
vehicle is set to be RM 850.

Monthly rental
The monthly rental of the factory is as provided by the agent/developer, which is RM 13000 per
month.

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Total wages for the employee

Table 8: Wages for the employee and the summation.

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Profit and break even

Monthly profit= Cost of goods sold (Materials cost + rental + wages + electricity)
= (280 x 850) (75322.80 + 13000 + 81500 + 10459.68)
= (252000) (180282.48)
= RM 57717.52
Variable cost/unit

= (Materials cost + electricity)/280

= (75322.80 + 10459.68)/280 = 306.4/unit

Fixed cost in a year = (94500 x 12) = RM 1134000

Units sold in a year = (12 x 280) = RM 3360
Break even sales unit = Fixed cost/ (Selling price per unit variable cost per unit)
= [(94500 x 12) + 344890]/ (850 306.4)
= 2720.54 units
Time to break even = (2720.51/3360) x 12 = 9.716 months

(*Most of the price and cost listed above were obtained from online sources such as Alibaba.com
and etc. As for the wages and bills they were referred from nsic.com.my)

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Promotion
In order for a new product to reach out to the end user level, it is important to promote it widely.
For the teams vehicle, advertising is chosen as the method for promotion. It is a form of
communication to persuade customers to buy the product.
Advantages of advertising:

Make business or product name to be more familiar to the public

Build a favourable image or reputation for the product
Introduce and inform to the public

Methods of advertising:

Comparative advertising
Cooperative advertising
Informational advertising
Direct mail

The teams human powered vehicle is a completely new product to the public. Therefore, the
focus will be mainly on informational advertising, which educates the public by introducing the
product (demonstrating the benefits and features of the vehicle), shows comparison to similar
types of product, and where to buy.
Product advertisement can work through different communication channels:

Website - Create a website to introduce/tutor people about the product. It can also allow
customers to make online purchase.
Social media - Facebook/Instagram. It is completely free and provides a sharing platform
for the people who are interested in the product.
Mail Flyers or brochures that can be distributed to the public to introduce the product.
Mass media Television, radio, newspaper and magazines (relatively a higher price
advertising method, yet effective).

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The target market of the vehicle designed by the team is set based on:

Demographics
- Teenagers and middle ages (willing to accept new products, ability to adapt to new
products)

Geographic
- Urban area (heavy traffic, lack of parking space, expensive petrol fees and toll, car
taxes and high instalment)
- To provide convenience to the customers (short distance travelling, exercise etc.)

Income
- Lower class customers (could not afford a car, need a cheap/budget vehicle as
transportation, convenient to ride to train/bus station, work place and school)
- Income lower than RM5000

Psychographics
- Enjoy recreational activities/exercise, enjoy sports, looking for healthy lifestyle, and
outgoing (like to work out, keep fit and in good figure)
- Advertise on TV sports channel, sports magazine, sports pages of newspaper

Figure 42: Example of a website (Trikke).

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